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May 26, 2019
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cloud native

Replex gets $2.45M seed round to help track cloud native spend

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Replex wants to help track cloud spending, but with a cloud native twist, and today it announced a $2.45 million seed round. The company previous raised $1.68 million in 2017 for a total of $4.15 million so far.

As companies shift to a cloud native environment, and move ever more quickly, it is increasingly important to get visibility into how development and operations teams are using resources in the cloud. Replex is designed to give more visibility into spending and to help optimize the container environment in the most economical way.

Company CEO and co-founder Patrick Kirchhoff says the product is about controlling spending in a cloud native context. “The Replex platform enables operators, finance and IT managers to see who spends what. We allow them then to right-size clusters, pods and container sizes for optimal results, and they are able to control the cost, manage chargebacks and find [optimal] capacity,” he explained.

Replex cloud spending control panel. Screenshot: Replex

While there are variety of similar cloud cost control startups out there, Kirchoff says his company has been purpose built for cloud native environments and that is a key differentiating factor. “We see that the way organizations work has completely changed because with the move to cloud native infrastructure, teams within the business lines are now able to provision infrastructure on their own. Central IT departments still need to control costs and govern these resources, but they don’t have the tools to do that anymore because the existing tools are built on architectures for traditional infrastructure, and not for the cloud native approach,” he said.

Kirchoff says that developers tend to over provision just to be on the safe side, but using data from Replex, customers can figure out the optimal amount to provision for a particular workload, work with development teams, and that can save money in the long run.

Investors across the two rounds include Entrepreneurs Investment Fund, eValue, EnBW New Ventures, High-Tech Gruenderfonds (HTGF) and Technologiegruenderfonds Sachsen (TGFS). The company is currently participating in the Alchemist Accelerator . The latest round closed in December. The previous one in May 2017.

IBM is betting the farm on Red Hat — and it better not mess up

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Who expects a $34 billion deal involving two enterprise powerhouses to drop on a Sunday afternoon, but IBM and Red Hat surprised us yesterday when they pulled the trigger on a historically large deal.

IBM has been a poster child for a company moving through a painful transformation. As Box CEO (and IBM business partner) Aaron Levie put it on Twitter, sometimes a company has to make a bold move to push that kind of initiative forward:

They believe they can take their complex mix of infrastructure/software/platform services and emerging technologies like artificial intelligence, blockchain and analytics, and blend all of that with Red Hat’s profitable fusion of enterprise open source tools, cloud native, hybrid cloud and a keen understanding of the enterprise.

As Jon Shieber pointed out yesterday, it was a tacit acknowledgement that company was not going to get the results it was hoping for with emerging technologies like Watson artificial intelligence. It needed something that translated more directly into sales.

Red Hat can be that enterprise sales engine. It already is a company on a $3 billion revenue run rate, and it has a goal of hitting $5 billion. While that’s somewhat small potatoes for a company like IBM that generates $19 billion a quarter, it represents a crucial addition.

That’s because in spite of its iffy earnings reports over the last five years, Synergy Research reported that IBM had 7 percent of the cloud infrastructure market in its most recent report, which it defines as Infrastructure as a Service, Platform as a Service and hosted private cloud. It is the latter that IBM is particularly good at.

The company has the pieces in place now and a decent amount of marketshare, but Red Hat gives it a much more solid hybrid cloud story to tell. They can potentially bridge that hosted private cloud business with their own public cloud (and presumably even those of their competitors) and use Red Hat as a cloud native and open source springboard, giving their sales teams a solid story to tell.

IBM already has a lot of enterprise credibility on its own, of course. It sells on top of many of the same open source tools as Red Hat, but it hasn’t been getting the sales and revenue momentum that Red Hat has enjoyed. If you combine the enormous IBM sales engine and their services business with that of Red Hat, you have the potential to crank this into a huge business.

Photo: Ron Mller

It’s worth noting that the deal needs to pass shareholder muster and clear global regulatory hurdles before they can combine the two organizations. IBM has predicted that it will take at least until the second half of next year to close this deal and it could take even longer.

IBM has to use that time wisely and well to make sure when they pull the trigger, these two companies blend as smoothly as possible across technology and culture. It’s never easy to make these mega deals work with so much money and pressure involved, but it is imperative that Big Blue not screw this up. This could very well represent its last best chance to right the ship once and for all.

Twistlock snares $33 million Series C investment to secure cloud native environments

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As the world shifts to a cloud native approach, the way you secure applications as they get deployed is changing too. Twistlock, a company built from the ground up to secure cloud native environments, announced a $33 million Series C round today led by Iconiq Capital.

Previous investors YL Ventures, TenEleven, Rally Ventures, Polaris Partners and Dell Technologies Capital also participated in the round. The company reports it has received a total of $63 million in venture investment to date.

Twistlock is solving a hard problem around securing containers and serverless, which are by their nature ephemeral. They can live for fractions of seconds making it hard track problems when they happen. According to company CEO and co-founder Ben Bernstein, his company came out of the gate building a security product designed to protect a cloud-native environment with the understanding that while containers and serverless computing may be ephemeral, they are still exploitable.

“It’s not about how long they live, but about the fact that the way they live is more predictable than a traditional computer, which could be running for a very long time and might have humans actually using it,” Bernstein said.

Screenshot: Twistlock

As companies move to a cloud native environment using Dockerized containers and managing them with Kubernetes and other tools, they create a highly automated system to deal with the deployment volume. While automation simplifies deployment, it can also leave companies vulnerable to host of issues. For example, if a malicious actor were to get control of the process via a code injection attack, they could cause a lot of problems without anyone knowing about it.

Twistlock is built to help prevent that, while also helping customers recognize when an exploit happens and performing forensic analysis to figure out how it happened.

It’s is not a traditional Software as a Service as we’ve come to think of it. Instead, it is a service that gets installed on whatever public or private cloud that the customer is using. So far, they count just over 200 customers including Walgreens and Aetna and a slew of other companies you would definitely recognize, but they couldn’t name publicly.

The company, which was founded in 2015, is based in Portland, Oregon with their R&D arm in Israel. They currently have 80 employees. Bernstein said from a competitive standpoint, the traditional security vendors are having trouble reacting to cloud native, and while he sees some startups working at it, he believes his company has the most mature offering, at least for now.

“We don’t have a lot of competition right now, but as we start progressing we will see more,” he said. He plans to use the money they receive today to help expand their marketing and sales arm to continue growing their customer base, but also engineering to stay ahead of that competition as the cloud-native security market continues to develop.

As Kubernetes grows, a startup ecosystem develops in its wake

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Kubernetes, the open source container orchestration tool, came out of Google several years ago and has gained traction amazingly fast. With each step in its growth, it has created opportunities for companies to develop businesses on top of the open source project.

The beauty of open source is that when it works, you build a base platform and an economic ecosystem follows in its wake. That’s because a project like Kubernetes (or any successful open source offering) generates new requirements as a natural extension of the growth and development of a project.

Those requirements represent opportunities for new projects, of course, but also for startups looking at building companies adjacent that open source community. Before that can happen however, a couple of key pieces have to fall into place.

Ingredients for success

For starters you need the big corporates to get behind it. In the case of Kuberentes, in a 6 week period last year in quick succession between July and the beginning of September, we saw some of the best known enterprise technology companies including AWSOracleMicrosoftVMware and Pivotal all join the Cloud Native Computing Foundation (CNCF), the professional organization behind the open source project. This was a signal that Kubernetes was becoming a standard of sorts for container orchestration.

Surely these big companies would have preferred (and tried) to control the orchestration layer themselves, but they soon found that their customers preferred to use Kubernetes and they had little choice, but to follow the clear trend that was developing around the project.

Photo: Georgijevic on Getty Images

The second piece that has to come together for an open source community to flourish is that a significant group of developers have to accept it and start building stuff on top of the platform — and Kubernetes got that too. Consider that according to CNCF, a total of 400 projects have been developed on the platform by 771 developers contributing over 19,000 commits since the launch of Kubernetes 1.0 in 2015. Since last August, the last date for which the CNCF has numbers, developer contributions had increased by 385 percent. That’s a ton of momentum.

Cue the investors

When you have those two ingredients in place — developers and large vendors — you can begin to gain velocity. As more companies and more developers come, the community continues to grow, and that’s what we’ve been seeing with Kubernetes.

As that happens, it typically doesn’t take long for investors to take notice, and according to CNCF, there has been over $4 billion in investments so far in cloud native companies — this from a project that didn’t even exist that long ago.

Photo: Fitria Ramli / EyeEm on Getty Images.

That investment has taken the form of venture capital funding startups trying to build something on top of Kubernetes, and we’ve seen some big raises. Earlier this month, Hasura raised a $1.6M seed round for a packaged version Kubernetes designed specially to meet the needs of developers. Just last week, Upbound, a new startup from Seattle got $9 million in its Series A round to help manage multi-cluster and multi-cloud environments in a standard (cloud-native) way. A little further up the maturity curve, Heptio has raised over $33 million with its most recent round being a $25 million Series B last September. Finally, there is CoreOS, which raised almost $50 million before being sold to Red Hat for $250 million in January.

CoreOS wasn’t alone by any means as we’ve seen other exits coming over the last year or two with organizations scooping up cloud native startups. In particular, when you see the largest organizations like Microsoft, Oracle and Red Hat buying relatively young startups, they are often looking for talent, customers and products to get up to speed more quickly in a growing technology area like Kubernetes.

Growing an economic ecosystem

Kubernetes has grown and developed into an economic powerhouse in short period of time as dozens of side projects have developed around it, creating even more opportunity for companies of all sizes to build products and services to meet an ever-growing set of needs in a virtuous cycle of investment, innovation and economic activity.

Cloud Native Computing Foundation projects. Photo: Cloud Native Computing Foundation

If this project continues to grow, chances are it will gain even more investment as companies continue to flow toward containers and Kubernetes, and even more startups develop to help create products to meet new needs as a result.

Microsoft’s Azure Container Instances are now generally available

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If you wanted to play modern software development buzzword bingo, talking about Azure Container Instances (ACI) would surely help you tick a few boxes. The service, which made its debut last July and which is now generally available, gives developers a serverless way to run Linux and Windows containers that frees them from having to even think about Kubernetes clusters and the like. There are no virtual machines to manage and scaling is not an issue.

At its core, ACI is all about simplicity and flexibility. Developers decide how much memory and compute cores they need and ACI handles the rest.

As Microsoft’s director of Azure Compute Corey Sanders told me, in his view, serverless is all about invisible infrastructure, microbilling and an event-driven programming model. With serverless containers, you get the first two (with CPU and memory usage billed by the second), without being tied to the event-driven model. Sanders also stressed this service treats containers like a first-class citizen on the Azure platform. “ACI is like a VM — but a container,” he said.

Another feature of ACI that Sanders highlighted was the built-in isolation, something you’d usually get by default with a virtual machine. With ACI, each individual container is protected at the hypervisor level, something that most other competing services — and most open-source container projects — can’t currently do. For security-conscious enterprises, security remains an issue when it comes to adopting containers, so this feature alone may remove some roadblocks for a few companies.

When ACI made it debut, it only supported Linux containers. Over time, the team added Windows Container support, too, and both are now generally available. As Sanders told me, the company is seeing quite a bit of demand from companies that want to lift and shift their existing .NET Windows applications to the cloud using ACI.

With today’s announcement, Microsoft is also dropping the prices for using ACI. Creating new instances is now free, for example, and the price per CPU and second went down from $0.0000125 to $0.000012. One gigabyte of memory now costs $0.000004 per second.

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